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Under threat: Online mortgage sales may hit brokers' business

Brokers could be left behind if online mortgage sales skyrocket, as predicted. We speak to MICHAEL OSBORNE of moneyQuest and TONY BICE of Finance Made Easy for their tips on future-proofing your business.

Video transcript below:

Donna Sawyer, Australian Broker Online
Donna Sawyer: Brokers may be left out in the cold if predictions online mortgage sales are set to skyrocket prove correct. With forecasts that more than half of all mortgages will be arranged via the web in the next 10 years, Michael Osborne of moneyQuest says those who act on the trend will succeed.

Michael Osborne, moneyQuest

Michael Osborne: There is no doubt that consumers are shifting their buyer behaviour to the internet like never before and I think for brokers it’s time to adapt and if they don’t adapt, they are potentially going to be left out in the cold.

Tony Bice, Finance Made Easy

Tony Bice: The brokers have got two choices, they can either embrace technology and look at the audience that is using that technology to generate their loan and that’s more and more younger people or they can stay with their tried and true [centres that influence] and hope that those referral sources continue to give them the business going forward.

Donna Sawyer: Tony Bice of Finance Made Easy says generating leads online is tough, but there is a place for brokers in the market if they get their strategy right.

Tony Bice: Banks like UBank if you like that have now, that are focusing on clients that are internet savvy, technology savvy, I guess they are reaping the rewards of that strategy. I don’t, I think there is plenty of space out there for everybody, if for every client that is comfortable to do an application online, there will be two clients that would be comfortable to seek information online, but then put themselves in the hands of an expert and that’s where the broker will certainly come to the fore.

Donna Sawyer: So what steps do brokers need to take to create an online presence? Outsourcing search engine optimisation is the first step says Michael Osborne of moneyQuest, but it doesn’t come cheap.

Michael Osborne: It’s very expensive and I think for most mortgage brokers the problem is is that they may work with a local website developer who at best has probably had one or two days in search engine optimisation. It’s an area of expertise and really you are going to need to find a much stronger solution than that to penetrate online.

Tony Bice: For a broker to start a strategy in the online space, they have really got to understand that it’s going to be an area that’s going to take up a fair bit of their time and they are going to have to look towards outsourcing that so that they can get the right expertise. Once you have made that decision, then the secret then becomes of working the internet in your favour so you can generate leads. It doesn’t happen overnight, it takes quite a number of years. Brokers that were doing this 10 years ago are reaping the rewards now. Brokers that identify that they need to bring it into a strategy now are going to reap the rewards further on down the track.

Donna Sawyer: This is Donna Sawyer reporting for Australian Broker Online.